Target-Date Funds With Annuities Are Gaining Ground. Is That Good for Your Retirement Plan?

#TargetDateFunds #RetirementPlanning #Annuities

Plus, how income and guaranteed lifetime withdrawal benefits work.

Guaranteed income in retirement sounds pretty nice, but what are the trade-offs to make it happen? Several big asset managers offer target-date funds with built-in annuities. However, it’s difficult to compare one against another because their strategies tend to differ. And retail annuities’ dubious reputation has set up a hurdle for mass adoption. But recent important developments could clear the path for these funds to appear in 401(k)s and other retirement plans. New Morningstar research explores why target-date funds with annuities are gaining ground in the US. Jason Kephart has dug into the data. Morningstar’s senior principal of multi-asset manager research explains what he found.

As Fidelity Adds Target-Date Fund With Guaranteed Income, Here’s What You Should Watch For

https://www.morningstar.com/funds/guaranteed-income-your-401k-sounds-good-theory

On this episode:

00:00:00 Welcome

00:00:59 What annuities are and why they got a bad rap

00:02:05 How in-plan annuities differ from retail versions

00:02:26 Why a proposed Department of Labor rule matters for 401(k) plans

00:03:08 Is momentum building for guaranteed income in 401(k)s?

00:04:18 Income annuities vs. guaranteed lifetime withdrawal benefits

00:07:09 What retirement savers should know now

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